Why did Prime Minister Sanae Takashi’s first visit to the U.S. result in a confirmed $40 billion investment in small modular reactors (SMRs)?

Executive Summary: Japanese Prime Minister Sanae Takashi’s first official visit to the United States following her appointment culminated in an agreement with President Donald Trump on a $40 billion investment in small modular reactor (SMR) nuclear energy projects—aimed squarely at meeting surging electricity demand from AI data centers. SMRs are already entering a quasi-commercial phase in the U.S., offering advantages including modularity, lower costs, and broad applicability—holding significant promise both economically and militarily. Japan’s investment is part of a broader strategic “capital-for-technology” initiative: by participating in U.S.-led construction, Japan seeks to acquire critical technologies and accumulate hands-on experience, paving the way for future domestic deployment to bolster national energy security—and potentially enable future military applications. On March 19, shortly after assuming office, Prime Minister Sanae Takashi made her inaugural visit to the U.S. and finalized, at the White House, a suite of cooperative projects under the economic security framework with U.S. President Donald Trump. One such project was the announcement of a $40 billion nuclear energy investment focused on small modular reactors (SMRs). According to Kyodo News, this $40 billion SMR investment will fund joint construction of nuclear reactors in Tennessee and Alabama by GE Vernova and Hitachi, Ltd. The stated objective is to meet the rapidly escalating power demands of AI data centers. However, some executives from Japanese private enterprises and financial institutions have voiced concerns. Senior executives at Japan’s largest banks remain uneasy about the project’s profitability. For instance, SMRs selected for the second batch of projects face persistent cost challenges—if mass production fails to materialize, construction costs will remain prohibitively high. I. Has the SMR nuclear energy project achieved commercialization in the U.S.? These Japanese executives’ concerns are not unfounded: small modular reactors (SMRs) have yet to achieve full-scale commercialization in the U.S. Yet those concerns may ultimately prove unnecessary—because SMRs have already entered a quasi-commercial phase. In other words, while large-scale commercial operation has not yet begun, SMRs stand on the very cusp of commercialization. Japan’s investment thus serves as the decisive final push needed to cross that threshold. Currently, NuScale Power leads the field: its SMR design has received certification from the U.S. Nuclear Regulatory Commission (NRC). The NRC-approved NuScale module is the first SMR design ever certified in the U.S., generating approximately 50–77 MW per module and scalable into larger power plants. It also marks the NRC’s first approval of a new commercial nuclear power plant in a decade. On March 4, the U.S. Nuclear Regulatory Commission (NRC) granted TerraPower—a nuclear energy company founded by Bill Gates—its first-ever license to construct a commercial SMR. TerraPower plans to begin construction this month in Wyoming, targeting commissioning of its demonstration reactor by 2030. TerraPower’s SMR employs sodium-cooled fast reactor technology, using liquid sodium as coolant (boiling point: 880°C), significantly boosting generation efficiency and reducing nuclear waste output to roughly 10% of that from conventional nuclear plants. The plant also integrates energy storage systems, enabling flexible output adjustment in response to fluctuating electricity demand—complementing highly variable renewable sources. In 2025, the Tennessee Valley Authority (TVA), in partnership with private enterprises, plans to build SMR nuclear facilities totaling approximately 6 GW in capacity. This initiative spans seven states and targets industrial users, data centers, and grid supply—the largest SMR deployment plan currently underway in the United States.

From hope to frustration: What challenges confront NuScale’s SMR project—and what does this mean for the future of nuclear energy?

Nuclear energy is an exceptionally advanced technology. Despite common misconceptions, it is among the safest and lowest-carbon energy sources available—and one of the few low-carbon options capable of on-demand dispatch. Consequently, nuclear power will play a pivotal role in the global transition toward net-zero emissions. Yet the nuclear industry faces a formidable challenge: prohibitively high costs. New nuclear plants routinely require investments running into tens or even hundreds of billions of dollars, take over a decade to build, and—once operational—often rank among the most expensive sources of electricity on the market. As a result, many governments and energy companies are increasingly abandoning this very technology, which once held immense promise for saving our planet. Enter the small modular reactor (SMR)—a novel nuclear reactor design poised to resolve all these issues, rekindle hope for nuclear energy, and rescue the entire industry. Regrettably, however, a cutting-edge foreign SMR project has just been canceled due to runaway costs. This prompts an urgent question: Is nuclear energy’s future inevitably doomed? Perhaps not. What exactly is an SMR? SMR stands for “Small Modular Reactor.” Traditional nuclear power plants typically house multiple massive, custom-built reactors—extremely complex structures requiring precision on-site assembly, resulting in exorbitant construction costs and lengthy timelines. By contrast, SMRs are compact and can be fully assembled in factories before being shipped to site. Although each SMR unit generates relatively modest power—requiring more than ten units to match the output of a conventional plant—their cost per megawatt of capacity is dramatically lower than that of traditional reactors. Why? Because factory-based mass production substantially reduces unit costs. Moreover, SMR deployment is significantly faster: reactors can be pre-manufactured off-site; their smaller size and standardized design simplify and accelerate on-site construction. SMRs also offer unmatched flexibility—additional units can be added or removed based on evolving demand. In contrast, expanding capacity at a conventional plant often requires decades and billions of dollars. Numerous companies are developing SMR technologies—but the frontrunner is NuScale Power. Its “Power Module” SMR is the only small reactor in the U.S. to have received formal design approval from the Nuclear Regulatory Commission (NRC), making it legally deployable across the country. NuScale’s lead stems partly from its use of pressurized water cooling—a scaled-down version of conventional commercial nuclear reactor technology. The relevant safety regulations and technical standards are already mature and well-established. Other SMR designs—such as helium-cooled or molten-salt-cooled variants—require entirely new safety validations and compel the NRC to develop new regulatory frameworks. Furthermore, NuScale uses conventional nuclear fuel widely employed in existing power plants, whereas more advanced SMR concepts may rely on highly enriched or otherwise specialized fuels—either scarce in supply or subject to strict international controls. Each NuScale Power Module generates 77 MW of electricity and measures approximately 20 meters tall and 2.7 meters wide and deep.

US NRC Approves Construction of Nation's First Small Modular Nuclear Reactor

20 hours ago

The US Nuclear Regulatory Commission approved the Tennessee Valley Authority to build the nation's first commercial small modular reactor in Tennessee. The 300-megawatt project utilizes a GE Vernova Hitachi boiling-water reactor to address regional power demand.

reuters

2026-09-29

US NRC Approves Construction of Nation's First Small Modular Nuclear Reactor

US NRC Approves Construction of Nation's First Small Modular Nuclear Reactor

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